So for a very long time, I had bad credit just by being stupid and irresponsible. I have since improved my credit score drastically to right around 680 for all 3 very recently.
Since my credit was so bad for so long my wife took on the responsibility of putting everything under her name including her vehicle ($25k), co-signing on my vehicle (31k), our house ($244k), and all credit cards. Prior to us being in a good financial state, we racked up about $30k in credit card debt and have just been paying the minimum. We are down to about $17k now but obviously, it just feels like banging our heads against a wall with how slow it's going.
Should I take out a debt consolidation loan to lower the interest rate and relieve some of the stress on her credit report? Is there something different I should do? Her credit has taken a hit because of DTI and we'd like to get it up to where she used to be which is right around 740. I also plan on refinancing my vehicle into my name to lower the rate as well because it's at 9% right now. Would that be advisable too?
in general, lower interest rate is going to save you dollars over time. but your bigger strategy should be to allocate more dollars towards payments AND put those cards away.
yes, I recently took out a personal loan with a shiny APR to consolidate 20k and save some cash, but looking back I think I could have did it without the loan and just a better strategy. I think more than anything a loan forced a payment of 1.5-2x the minimums AND without being able to add to a balance, ie credit cards.
without any DP it's hard to be precise, but consider the image below. if you are paying the minimum (~2%), it's going to take you 9 years to pay off. once you start paying 1.5-2x the minimum you start making a dent in the balance, time, and interest dollars. a loan is going to force you do to that anyway, considering Prosper, etc. require fixed terms (3-5 years) and higher fixed payments.
in any case, these spreadsheets are offered online free, just Google search. play with the numbers to see what time frame you are targeting vs what you can afford.